Commissioners Ricky Arriola, Joy Malakoff and John Elizabeth Alemán voted in favor of the ordinance on a first reading, with commissioners Kristen Rosen-Gonzalez, Mickey Steinberg and Michael Grieco voting against it.

Miami Beach Mayor Philip Levine abstained from voting on the measure because he owns property adjacent to the proposed project. The ordinance would have raised height limits from 50 feet to 90 feet on 150 feet of frontage along Purdy Avenue and 60 feet on the north side of Dade Boulevard.

The city’s planning department supported the measure because the maximum footprint of the building would not have exceeded 40 feet above the 50-foot height of the proposed building.

This was the second time Deco Capital Group had proposed a height increase for eight lots it acquired in 2014 for $14 million. New York-based RWN Real Estate Partners, backed by billionaire Marc Rowan, is a majority partner in the venture. The planned building would have had 15 luxury condos on top of premium retail, overlooking Maurice Gibb Park.

In June, Deco Capital Group asked that the height increase be withdrawn from consideration by the commission after it was unable to reach agreement with residents living at the adjacent Lofts at South Beach Condominium, some of whom would have their bay views blocked by the new building, and with Beach Towing, which holds a deed restriction that it says prevents parking on property previously owned by the towing company. The deed restriction affects three of the eight lots acquired by Deco Capital.

Deco Capital has long claimed that the deed restriction wasn’t relevant because the property was going to be used for residential and retail uses, not as a parking lot, and only required enough parking to service those functions. After the commission vote, Bradley Colmer, founder of Deco Capital, told The Real Deal that the company would “move forward with other options,” that would not require a height increase.

Colmer said Deco Capital could “always design a building where parking is not on the three lots that have the deed restriction in question,” and he said those plans could include a hotel or office space on upper floors above retail.

Additionally Deco Capital has gone to court alleging that Beach Towing was operating illegally, a claim based on Beach Towing not receiving the proper permits to operate a tow lot prior to a 1989 zoning change that prohibited two lots from operating at its location on Dade Boulevard. In December, a judge hearing the case ordered all sides to mediation. But Colmer said on Wednesday he was not confident the issue could be resolved because “we’ve already met with the opposing parties at least 15 times.”

On Wednesday Ralph Andrade, a lawyer for Beach Towing, told TRD that the deed restriction remains in place and that negotiations with Deco Capital are “over.” Nicholas Machado, the condo president of the adjacent Lofts at South Beach condo, also said residents would no longer meet with Deco Capital.

For his part, Colmer said Deco Capital’s goal was to reduce density in the area and allow for a “pedestrian-focused development.” “The point we made was that 2,000-square-foot apartments take up a lot less of an impact than you get from 2,000 square feet of office or commercial space,” he said.